Former AEL&P executive present at loan discussions

Posted: Sunday, April 27, 2008

By GREG SKINNER

David Stone recused himself from Thursday's Juneau Assembly Finance Committee debate and vote that recommended the city loan his former employer $3 million, but the committee chairman did not recuse himself from two meetings creating the idea.

Mayor Bruce Botelho said Stone helped City Manager Rod Swope and himself create the plan to loan Alaska Electric Light & Power Co. $3 million to offset fuel costs as its generators consume more than 50,000 gallons of diesel daily to power the city.

Until recently, Stone was an executive with the private utility. He retains a stock interest in and close ties to the company, which cannot itself pay for the fuel needed to provide electricity during the emergency.

"There's no doubt that David continues to have financial interest in the company," Botelho said. "I was interested in making use of his knowledge of how the utility operates."

Stone said the mayor asked for his advice on the issue because of his intimate knowledge of the issue and AEL&P.

"I have done that, no question" Stone said. "I obviously care about the community and want to see us get through this."

Botelho said city leadership offered the loan to AEL&P. The goal is to help Juneau ratepayers through a 447 percent instantaneous rate hike, he said. One of the stipulations for the loan requires AEL&P to spread the rate hike out over 12-months, something the company said it could not do before the possibility of the loan came along.

Stone's participation did not violate any ethics code, Botelho said.

Stone said he first saw the loan idea presented on a list that included other alternatives in meeting with Swope, Botelho and Brian Holst of the Juneau Economic Development Council. The idea was brought up again in a subsequent meeting.

Stone said his involvement advising Botelho was appropriate and he crossed no ethical bounds. Stone said he went to the city attorney after the meetings to advise that he couldn't vote on the issue.

"I am very careful about this stuff," Stone said.

City Attorney John Hartle said he was unaware of the April 20 meeting resulting in the offer to loan $3 million of city emergency funds.

Hartle didn't know if Stone's participation in that meeting constituted any wrongdoing.

"It was just an idea," he said before reaffirming that Stone had stepped aside during the public committee debate and vote.

"I don't know what I could tell you if I did know," Hartle said.

At least two members of the Finance Committee, who voted Thursday to forward the loan resolution to a final vote Monday, had no idea who was behind the idea. Assembly members Bob Doll and Merrill Sanford said on Friday that they did not know where the loan idea came from.

Sanford said he was not privileged with any knowledge about the city's response to the energy crisis. City staff has not consulted Sanford on the disaster response plans thus far, he said.

After hearing that Stone aided Botelho and Swope, Doll said he had no problem continuing with the vote to loan the money. Doll doesn't see any ethical violation in Stone's participation.

"By the time this decision is final, we will have asked a lot of questions," Doll said. "I hope we hear some details on Monday."